The Economy

November 24, 1985|By Deanne Brandon

DEBT CUTS SPENDING. American consumers, saddled with a record amount of debt, reduced their purchases shaply in October to send personal spending into the biggest tailspin in 25 years. The Commerce Department said personal consumption spending dropped 0.9 percent, mostly because new-car sales fell after automakers' incentive programs ended. Analysts said consumer spending is unlikely to improve much in coming months. . . . The gross national product grew at a surprising rate of 4.3 percent in the third quarter, defying predictions that the earlier estimate of 3.3 percent would have to be revised downward. Administration spokesmen were enthusiastic, saying the full-year goal of 3 percent growth was attainable. Private economists were more restrained, noting that the increase could be accounted for largely as a result of slower inflation.